Wanna Know Who Will Win The Election?

The election is 11 days away and I will likely be commenting on it in each blog until then. As you know, my thesis has always been that elections absolutely do not matter for the markets nor economy until we get to November. All year long, all this posturing and fear mongering has been absurd and annoying. These pundits with Harris and Trump portfolios. They know not of what they speak. 100 years of data suggest that’s it’s all a folly. I can’t tell you how many people I have met this year who said they won’t invest until after the election. Every four years, we get this wrong way emotion that has rarely been proven correct.

Here’s what I know for sure. Markets hate uncertainty. They thrive on certainty. We know for a fact that either Kamala Harris or Donald Trump will be our next president. Like it, love it, hate it, it’s all irrelevant. One of two people are going to win. You don’t think the markets know this too? They have days, weeks and months to adjust and adapt. The outcome becomes somewhat but not fully priced in.

Many of you know that we have a presidential election model. Its pretty darn good, having correctly predicted all elections this century. It was last wrong in 1992. It is simply based on recent economic data and three time series of stock market returns. The closer to the election it is, the more accurate the model. I have not run it yet because it’s too far out, but I will start looking daily next week.

Markets continue to be sanguine. While the 30+ day of not having back to back losses ended this week, it was only by a hair. There hasn’t been a pullback since early September or a real correction since the August mini-crash.

Volatility as measured by the VIX remains curiously elevated and it can’t be just because of the election. The VIX should be much lower with stocks at or close to all-time highs.

The Dow Industrials continue to hit upside target after target as the index gets closer to my 47,000 big target before the bull market ends.

It has been the most beautiful October in CT except for one quick bout of cool temps in the 50s. Hard to believe, but we have only had one day of rain since the third week of August. Of course, we planted a dozen new trees so daily watering has been a must and a pain in the neck. Lots on tap for the weekend. The middle guy comes home for the weekend for the first time this semester. Fall baseball championships and the UCONN football game on Saturday. On Sunday I head to Dallas for a semi-annual conference with my peers and industry friends. LET’S GO YANKEES!

On Wednesday we bought more SPYB. On Thursday we bought AMPS, PDBC, more QQQW, NEM and QLD. We sold PEP, some SPYB and some TLT.